Archive | December, 2012

Wayback Machine: December 2007, 2002 & 1997

Time to step into the way back machine to see what we were writing about 5, 10 and 15 years ago.

Five years ago in 2007 major charitable foundations, with the notable exception of the Gates Foundation, are initiating or strengthening efforts to harmonize the social and environmental effect of their endowment investments with their philanthropic goals, according to a report in the LATimes. (Foundations align investments with their charitable goals, 12/29/07) Continue Reading →

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Shareholder Lawsuits: Where is the Line between Legitimate and Frivolous?

Larcker, David F. and Tayan, Brian, Shareholder Lawsuits: Where is the Line between Legitimate and Frivolous? (November 27, 2012). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance and Leadership No. CGRP- 29. Available on SSRN. Shareholders of public companies are not responsible for designing executive compensation packages. Still, a shareholder vote on compensation is required in two circumstances: when a company wants to establish an equity-based compensation plan, and annually as part of the Dodd Frank requirement shareholders have an advisory “say on pay.” In deciding how to vote, shareholders rely on information provided in the annual proxy. Continue Reading →
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Video Friday: Corporate Governance in Singapore

Does Singapore have what it takes to be #1… in the world? The latest CG Watch Market Scores for corporate governance compiled by the Asian Corporate Governance Association revealed that Singapore tops the table in the region, with a score of 69.

Hong Kong and Thailand round out the top three, with 66 and 58 points respectively, closely followed by Japan and Malaysia, which  with 55 points each. Continue Reading →

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Don't Miss Directors Forum 2013: Directors, Management & Shareholders in Dialogue

Corporate Directors Forum is bringing together distinguished business leaders from a variety of industries, along with fund managers, union officials, consultants and others to discuss the most challenging issues directors and officers face.

This exciting conference, being held January 27-29, 2013 at the University of San Diego, is designed to encourage personal interaction between attendees and the nation’s leading corporate governance authorities. Attendance at the event is limited to create an intimate setting for quality participation and networking. Be at the center of America’s corporate governance industrial complex. Ticket prices and lodging increase if your reservations are postmarked after January 3rd.  Continue Reading →

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Key Changes to Proxy Advisor Policies for 2013

I was going to write-up a short guide to recently announced changes by Institutional Shareholder Services and Glass Lewis but after reading a recent Alert from Weil I’ve decided to save time by simply touching on a few of the main points and recommending readers go directly to the Alert. Why reinvent the Weil? (Sorry, I couldn’t help myself.) I’ve also included a link to it in the Shareowner’s Action Handbook for future reference. Continue Reading →

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UNFI Vote: Have We Turned the Corner on Annual Elections?

J. McRitchie, UNFI Shareowner

My proposal to declassify the board at United Natural Foods, Inc. ($UNFI) passed by an overwhelming margin of 87.89%:

  • 38,086,048 for
  • 5,248,963 against

See their 8-K filing. Text (pdf) of proposal and opposition. Of course, the margin would have been even higher without insider holdings and blank votes going to management. Have we turned the corner on declassification measures to the point where companies might as well throw-in the towel and declassify when faced with such proposals? Continue Reading →

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Most S&P 500 Companies Now Reporting on ESG Issues

(Reuters, 18 December 2012) The number of S&P 500 and Fortune 500 companies managing and reporting performance on environmental, social and governance (ESG) issues more than doubled from 2010 to 2011, according to an analysis by Governance & Accountability Institute.

G&A Institute, the data partner for the Global Reporting Initiative (GRI) in the US, UK and Ireland, says in last year’s report, 19 percent of the S&P 500 reported. In the 2012 report, the number jumped to 53 percent. Continue Reading →

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Shareholder Proposals: SLB 14G

On October 16, 2012, the SEC published another “Staff Legal Bulletin” with guidance on shareowner proposals submitted to public companies pursuant to Rule 14a-8. SLB No. 14G provides the Division of Finance’s views regarding:

  • Proof of ownership under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal;
  • the manner in which companies should notify proponents of a failure to provide proof of ownership; and
  • the use of website references in proposals and supporting statements. Continue Reading →
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Lowell Milken Institute Offers Law Teaching Fellowship

Lowell Milken

Lowell Milken

The Lowell Milken Institute for Business Law and Policy at UCLA School of Law is now accepting applications for the Lowell Milken Institute Law Teaching Fellowship, a full-time, year-round, one or two academic-year position (approximately July 2013 through June 2014 or June 2015).  The position involves law teaching, legal and policy research and writing, preparing to go on the law teaching market, and assisting with organizing projects such as conferences and workshops, and teaching.  No degree will be offered as part of the Fellowship program. Continue Reading →

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FactSet Research (FDS): How I Voted – Proxy Score 100%

FactSet Research Systems Inc. ($FDS) is one of the stocks in my portfolio. Their annual meeting is coming up tomorrow, on 12/18/2012. ProxyDemocracy.org had collected the votes of three funds when I voted on 12/14/2012.  I voted with management 100% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes) Continue Reading →

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Infosys (INFY) Tops Governance List: Honor or Scam?

I was delighted to see that one of the stocks in my portfolio, Infosys ($INFY), has been ranked #1 in corporate governance by IR Global Rankings (“IRGR”). (Infosys is number one for corporate governance practices: IR Global Rankings, The Economic Times, 12/13/2012) That sounds like quite an achievement. Unfortunately, when I tried to find more about the basis of the award, I couldn’t really verify the assessment. From what I know, Infosys has better corporate governance than most, but is it really the best? Continue Reading →

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Another Twinkie Defense

Hostess In the process of complete liquidation, Hostess essentially admits it robbed the pensions of 18,000 unionized workers and put it toward executive pay for winding down the company. According to AlterNet,

Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.

Read the expose, Twinkie CEO Admits Company Took Employees Pensions and Put It Toward Executive Pay.

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UNFI Locked Out ShareOwners but We Voted to Declassify the Board: Company Now Seeks Feedback on Meeting Format

I attended a virtual-only meeting of United Natural Foods, Inc. yesterday and was pleased that a majority of shares were voted in favor of my proposal to declassify the board. That, combined with a move to majority vote requirements for directors a few years ago, helps move UNFI ($UNFI) into the center of the pack with regard to corporate governance. However, I am very disappointed with the lockout style annual meeting. They said they are open to change. Of course, that may depend on shareowners providing feedback. I hope you will join me in requesting changes. I tell you how at the end of this post and I make it a painless cut and paste exercise.   Continue Reading →

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Video Friday Double Feature: The Interconnected World of Bartley J. Madden & Mr. Burns Explains the Fiscal Cliff

Bartley J. Madden

Friday’s are often a good time for reflection, with people thinking about their dreams and the weekend. Today, let’s think about the transformative power of directors. Before we get to Bartley J. Madden, consider Douglas Y. Park statement in Strategy and Compliance As Competing Imperatives For Corporate Boards:

As long as the business judgment rule gives directors an incentive to focus on compliance and risk oversight issues, that will be their priority.  Strategy, an area where directors can add value, will continue to take a back seat. Continue Reading →
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Research Director: Hong Kong, China

The Asian Corporate Governance Association (ACGA), an independent non-profit association based in Hong Kong and one of the region’s foremost organizations working in the emerging field of corporate governance, is seeking applications for the new position of Research Director – China / Hong Kong. ACGA carries out its work through research, education and advocacy in 11 Asian markets and this position marks an expansion of the Association’s contribution to China. Continue Reading →

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UNFI: How I Voted – Proxy Score 17%

United Natural Foods ($UNFI) is one of the stocks in my portfolio. Their annual meeting is coming up on 12/12/2012. ProxyDemocracy.org had collected the votes of three funds when I voted on 12/5/2012.  I voted with management only 17% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes) Continue Reading →

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Boys' Club Still in Charge of California Businesses

Photo of Amanda Kimball

Amanda Kimball

The 400 largest companies headquartered in California, representing almost $3 trillion in shareholder value, still resemble a “boys’ club” with women filling fewer than 10 percent of top executive jobs, a University of California, Davis, study has found. Incremental gains have been pitiful, in my opinion.

The Graduate School of Management’s eighth annual UC Davis Study of California Women Business Leaders — a yearly benchmark for the Golden State’s lack of progress in promoting women business leaders — paints a dismal picture for women in leadership during fiscal year 2011-2012. Some of the best known among these top companies, or the California 400, have no women leaders. Continue Reading →

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Empty Voting: Empty Promises

Jay M. Hoffman and Melissa Ghislanzoni of Miller Thomson in Toronto recently posted Empty Voting – Waiting for a Regulatory Response. While focused on Canada, the post applies equally to the US. The recent Telus decision of the British Columbia Court of Appeal “appears to signal a green light for the continuation of empty voting, at least until a regulatory response is implemented.” That case involved Mason Capital Management LLC, a US hedge fund. The Court found no violation of law, “to the extent that cases of ’empty voting’ are subverting the goals of shareholder democracy, the remedy must lie in legislative and regulatory change.” Continue Reading →

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Division of Corporation Finance Director Meredith Cross to Leave SEC

Washington, D.C., Dec. 4, 2012 — The Securities and Exchange Commission today announced that Meredith B. Cross, Director of the Division of Corporation Finance, will leave the SEC at the end of the year to return to the private sector.

Ms. Cross has served as the Division’s Director since June 2009. She joined Chairman Mary Schapiro’s senior leadership team in the wake of the financial crisis and played a key role in the Chairman’s initiatives to rebuild the agency’s credibility, improve overall operations at the SEC, and build a more resilient, integrated program designed to foresee and reduce the likelihood of future crises in the securities markets. Continue Reading →

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Board Portals: Some Considerations

Guest post: Kristina Veaco, corporate governance consultant, Veaco Group.  

Electronic delivery of board materials has been around for several years, in part because of the savings it offers in terms of time spent preparing physical board books, the quantities of paper and binders, and the inevitable security issues tied to physical delivery of sensitive board materials.  The adoption and acceptance of electronic delivery of board materials increased significantly with the advent of tablets such as the iPad. Continue Reading →

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